Describe what is meant by acceptable audit risk. Explain why each of the following statements is true:
a. A CPA firm should attempt to achieve the same audit risk for all audit clients when
circumstances are similar.
b. A CPA firm should decrease acceptable audit risk for audit clients when external
users rely heavily on the statements.
c. A CPA firm should decrease acceptable audit risk for audit clients when engagement
risk is high.
d. Different CPA firms should attempt to achieve reasonably similar audit risks for cli-
ents with similar circumstances.
